European car registrations fall 2.8%

Renault sales drop 16%, Volkswagen sees rise

SimonKennedy

LONDON (MarketWatch) -- Western European passenger car registrations fell 2.8% in November, showing a stagnation in the market, the trade association ACEA said Wednesday,

"Considering that the number of working days was substantially the same... these results seem to confirm a stagnation of the market," the Belgian-based association for automakers said.

Registrations, which are effectively the equivalent of sales figures, were pulled down by falls in four out of the five main European markets. A 3.1% rise in Italy was not enough to offset Britain's 7.9% fall in sales figures.

Of the five biggest car manufacturers by market share, Renault (013190) saw the biggest fall in year on year registrations, dropping 15.8%. The fall resulted in Renault's market share falling to 9.7% from 11.3%.

Renault's figures were worse than the roughly 10% fall the market was expecting, said one sell-side analyst who didn't want to be named.

Renault's shares, however, rose 0.2%, indicating the market had priced in a lot of possible bad news following the company's shock profit warning last month, the analyst noted. In November Renault announced its 2005 operating margin target had dropped to above 3% from above 4%.

Market leader Volkswagen (766400), which has a 19.9% market share, saw registrations rise 0.8%. General Motors
GM, +3.40%
was the only other top-five manufacturer to see an increase, with sales edging up 0.1%.

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